Indemnity
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Indemnity is the right to receive compensation from another for a loss paid. Indemnity does not alter the assignment of liability, but permits the indemnified to effectively escape the burden of paying for the liability incurred. An insurance contract is the most common form of indemnification and source of indemnity.
Indemnification is a promise, usually contractual, to protect a party from financial loss. Indemnification may work by either direct compensation to the injured or a reimbursement to the liable. Typically, indemnification is not available to those who intentionally cause injury.
Indemnification is common, not only to insurance contracts, but to many other business arrangements. The corporate statutes of many jurisdictions indemnify its directors and officers against breaches of fiduciary duties. Indemnification is also common in intellectual property licenses in which the licensor does not want to be liable for misdeeds of the licensee. A typical license would protect the licensor against product liability and patent infringement.
This is often stated in addition to a requirement that one party "hold harmless" the other. Hold harmless by itself does not imply indemnification. Indemnification includes assuming the liability of all claims brought against the protected party within the scope of the agreement. Hold harmless agreements only prevent the agreeing party from bringing action against the protected party, it doesn't protect the protected party from the actions of other parties.
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Freeing of slaves and servants
Slaveowners are said to suffer a loss whenever their slaves or servants are granted their freedom. A tacit belief exists that harm is caused to slaveowners whenever slaves or servants are released. Slaveowners may be paid to cover their losses.
When the slaves of Zanzibar were freed in 1897, it was by compensation since the prevailing opinion was that the slaveowners suffered the loss of an asset whenever a slave was freed.
In the 1860s in the United States, U.S. President Abraham Lincoln had requested many millions of dollars from Congress with which to pay slaveowners "for the loss of their property." On July 9th, 1868, part #4 of the Fourteenth Constitutional Amendment dismissed all of the claims that slaveowners had been injured by the freeing of the slaves.
In 1807-08, in Prussia, statesman Baron Heinrich vom Stein introduced a series of reforms, the principal of which was the abolition of serfdom with indemnification to territorial lords.
Haiti was required to pay an indemnity of 150,000,000 francs to France in order to atone for the loss suffered by the French slaveowners.
Costs of war
The nation that wins a war may insist on being paid compensations for the costs of the war, even after having been the creator of the war.
- Following the Sino-Japanese War of 1894-95, the Treaty of Shimonoseki required that China pay Japan the sum of 200,000,000 taels (or liangs).
- China incurred an indemnity which resulted from massacres of foreigners during the Boxer Rebellion. The payment of 450,000,000 Haikwan taels, or $330,000,000 became necessary.
Indemnity in Unification Church belief
In the Unification Church, indemnity is a theological term involved in the absolution of sin. Usually, a sinner may pay 'lesser indemnity' by performing an act of contrition. A secular counterpart to lesser indemnity would be if a child broke a neighbor's window, and the neighbor accepted the child's apology as settling the matter.
